Illinois Department of Revenue
Publication 130 August 2022
Who is Required to Withhold Illinois Income Tax
The information in this publication
is current as of the date of the
publication. Please visit our website at
tax.illinois.gov to verify you have the
most current revision.
This publication is written in the plain
English style so the tax information is
easier to understand. As a result, we
do not directly quote Illinois statutes
and the Illinois Administrative Code.
The contents of this publication are
informational only and do not take
the place of statutes, rules, and court
decisions. For many topics covered
in this publication, we have provided
a reference to the applicable section
or part of the Illinois Administrative
Code for further clarication or more
detail. All of the sections and parts
referenced can be found in Title 86 of
the Code.
About this publication
Publication 130, Who is Required to Withhold Illinois Income Tax, is about Illinois
income tax withholding requirements. The objectives of this publication are to identify
• who is an employer or payer;
• who is an employee or payee;
• when withholding must occur;
• other withholding requirements for payments of lottery or gambling winnings and
purchases of rights to lottery winnings;
• what forms you must give to employees, payees, and lottery or gambling winners;
and
• what records you should keep.
Related publications:
• Publication 131, Withholding Income Tax Payment and Filing Requirements;
• Booklet IL-700-T, Illinois Withholding Income Tax Tables, to calculate withholding;
• Publication 110, W-2, W-2c, W-2G, and 1099 Filing and Storage Requirements for
Employers and Payers, including New 1099-K Electronic Filing Requirements; and
• Publication 121, Illinois Income Tax Withholding for Household Employees.
Get Illinois Department of Revenue forms and information at tax.illinois.gov
Taxpayer Bill of Rights
You have the right to call the Illinois Department of Revenue (IDOR) for help in resolving tax problems.
You have the right to privacy and condentiality under most tax laws.
You have the right to respond, within specied time periods, to IDOR notices by asking questions, paying the amount due, or
providing proof to refute the IDOR’s ndings.
You have the right to appeal IDOR decisions, in many instances, within specied time periods, by asking for department
review, by ling a petition with the Illinois Independent Tax Tribunal, or by ling a complaint in circuit court.
If you have overpaid your taxes, you have the right, within specied time periods, to a credit (or, in some cases, a refund) of
that overpayment.
For more information about these rights and other IDOR procedures, you may write us at the following address:
PROBLEMS RESOLUTION OFFICE
ILLINOIS DEPARTMENT OF REVENUE
PO BOX 19014
SPRINGFIELD IL 62794-9014
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Who is Required to Withhold Illinois Income
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Contents
General Information
Who is required to withhold Illinois Income Tax? ............................................................................ 2
Who is an employer or payer? ........................................................................................................ 3
Who is an employee or payee? ....................................................................................................... 3
Must I register to withhold Illinois Income Tax? .............................................................................. 3
What happens after I register? ....................................................................................................... 3
What should I do if I move or change my business name? ............................................................. 3
What should I do if I sell or transfer ownership of my business? .................................................... 3
What if I no longer have employees or payees from whom I withhold Illinois Income tax or my
business has closed? ..................................................................................................................... 3
What if I am a seasonal employer? ................................................................................................ 3
Withholding Illinois Income Tax for My Employees
When must I withhold Illinois Income Tax from my employee’s compensation? ............................ 4
When is compensation paid in Illinois? ........................................................................................... 4
When am I not required to withhold Illinois Income Tax? ............................................................... 5
Am I required to withhold income tax for another state if my employee is not an Illinois resident? 6
What forms must my employee complete? ..................................................................................... 6
Do I owe other Illinois employment taxes?...................................................................................... 7
What forms must I give my employee? ........................................................................................... 7
What forms must I submit to the Illinois Department of Revenue? ................................................. 7
How do I complete Form W-2 for my employee showing income and withholding for Illinois? ....... 8
How do I complete Form W-2G or Form 1099 for my payee showing withholding for Illinois? ....... 8
Withholding Illinois Income Tax for Lottery or Gambling Winnings
When must I withhold Illinois Income Tax from lottery winnings? ................................................... 9
When must I withhold Illinois Income Tax from gambling winnings? .............................................. 9
What forms must a winner complete? ............................................................................................ 9
What forms must I give each recipient? .......................................................................................... 9
What forms must I submit to the Illinois Department of Revenue? ................................................. 10
What if the due date falls on a weekend or state recognized holiday? ........................................... 10
Where do I get help? ....................................................................................................................... 10
Withholding Illinois Income Tax for Purchases of the Rights to Lottery Winnings
Do I have an obligation to withhold Illinois Income Tax from purchased lottery winnings? ............ 10
When must I withhold Illinois Income Tax from purchased lottery winnings? ................................. 10
Illinois Income Tax Forms for Determining Withholding from Employees and Lottery
or Gambling Winners ............................................................................................................................ 11
Oce locations ...................................................................................................................................... 12
General Information
Who is required to withhold Illinois
Income Tax?
Generally, you must withhold Illinois Income Tax from payments
you make for
• employee compensation (i.e., wages and salaries including
bonus, overtime, and commission pay) that is paid in Illinois
and from which you are required to withhold federal income
tax, usually reported to a payee on Form W-2,
• non-wage income such as pensions, annuities, employment
income, and sick pay, that you have agreed to voluntarily
withhold, usually reported to a recipient on Form 1099,
• gambling winnings greater than $5,000 from an Illinois casino
or race track, including sports wagering winnings, from which
you are required to withhold federal income tax, usually
reported to a payee on Form W-2G,
• Illinois lottery winnings of $1,000 or greater usually reported to
a payee on Form W-2G, or
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Who is Required to Withhold Illinois Income
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General Information (continued from Page 2)
Must I register to withhold Illinois
Income Tax?
If you are required to or voluntarily withhold Illinois Income
Tax for your Illinois employees or payees, you must register
with IDOR and tell us the date your Illinois payroll will begin.
Exception: Household employers should refer to Publication 121,
Illinois Income Tax Withholding for Household Employees.
To register your business you have the following options:
• register electronically with the online Illinois Business
Registration Application on MyTax Illinois (registration
conrmation generally available in 1-2 days) at tax.illinois.gov,
• complete and mail Form REG-1, Illinois Business Registration
Application (registration conrmation generally available in 6-8
weeks) and any necessary schedules, or
• visit one of our regional oces (see Page 12).
You will receive a temporary tax account number unless you already
have received your federal employer identication number (FEIN).
What happens after I register?
If you are a new registrant you are assigned to the monthly payer
and quarterly return schedule. See Publication 131, Withholding
Income Tax Payment and Filing Requirements. Visit our website at
tax.illinois.gov for more information regarding our electronic options.
What should I do if I move or change my
business name?
If your business name or address has changed from your last
return without changing owners, check the appropriate box on Form
IL-941, Step 1, and enter your new business name and address in
Step 1. File your completed return (Form IL-941) by its due date.
You also can make changes to your business name by completing
and submitting Form REG-3-C, Business Information Update, and
updates to your address on MyTax Illinois.
What should I do if I sell or transfer
ownership of my business?
If you sell or transfer your business, you must le a nal
r e t u r n ( F o r m I L - 9 4 1 ) a t t h e e n d o f t h e n a l l i n g p e r i o d .
You may also be required to le Form CBS-1, Notice of Sale,
Purchase, or Transfer of Business Assets, at least 10 days prior to
the sale.
What if I no longer have employees or
payees from whom I withhold Illinois
income tax or my business has closed?
If your business has permanently stopped withholding because it
has closed or you no longer pay wages, complete Step 2, Line B, on
Form IL-941, check the box to indicate that this is a nal return, and
enter the date you stopped paying wages. You also can cease your
account on MyTax Illinois.
• the purchase of the rights to Illinois lottery winnings, usually
reported to the purchaser on Form 1099-MISC.
However, there are some situations that do not require you to
withhold Illinois Income Tax. See “When am I not required to
withhold Illinois Income Tax?” for more information. We do not
require a separate agreement for payments covered by a federal
voluntary withholding agreement. If requested by a payee,
you can enter into a voluntary agreement and withhold Illinois
Income Tax on Illinois income such as individual retirement
accounts (IRAs) or pensions. Note: If you agree to a voluntary
withholding agreement then you are required to withhold Illinois
income tax.
As a withholding agent (person who withholds income
tax), you are liable for the taxes that you are required to
withhold and that you volunteer to withhold. Because we
are required to collect taxes (and issue assessments when
these taxes are not paid), Illinois law states that the amounts
required to be withheld and paid to us (and any penalties
and interest) are considered to be a tax on you.
Who is an employer or payer?
You are an employer if you are any of the following:
• a person or organization who has an oce or transacts
business in Illinois for whom a worker performs a service
as an employee and you are the person who is liable to
withhold and pay federal income taxes to the Internal
Revenue Service (IRS).
• a person or organization who has an oce or transacts
business in Illinois and who has control of the payment of
wages for employee services, if the employer does not have
control of the payment of wages.
• a payer who has an oce or transacts business in Illinois
and who makes payments from which federal income taxes
are withheld (e.g., gambling or lottery winnings).
You are a payer if you are any of the following:
• a person or organization who pays non-wage income such
as pensions, annuities, employment income, and sick pay,
that you have agreed to voluntarily withhold;
• a person or organization that pays gambling or lottery
winnings; or
• a person or organization who purchases the rights to lottery
winnings.
See IRS Publication 15 Circular E, Employer’s Tax Guide, for
more information.
Who is an employee or payee?
An employee is either
• a person who performs services subject to the legal control
and direction of an employer, or
• an Illinois resident who receives payments on which federal
income tax is withheld by the employer.
A payee is a person who receives non-wage income, gambling
or lottery winnings, or a lump sum payment for rights to lottery
winnings.
See IRS Publication 15 Circular E, Employer’s Tax Guide, for
more information.
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Withholding Illinois Income Tax for My Employees
What if I am a seasonal employer?
If you are a seasonal business and have ceased paying wages
temporarily (e.g., you will be rehiring employees during the next
year), continue to le your returns. Even if you do not pay any
wages or withhold any tax, you still must le Form IL-941 and
complete a Schedule P, Illinois Withholding Schedule, for each
reporting period. If you had no withholding for the ling period,
report zero on Line 2 of Form IL-941 and on the Schedule P, enter
your business name, FEIN, and zeros in both the income and
withholding columns.
When must I withhold Illinois Income Tax
from my employee’s compensation?
You must withhold Illinois Income Tax when you withhold federal
income tax from compensation you paid in Illinois. Compensation
is paid in Illinois when the employee’s services are “localized” in
Illinois. This statement applies to all individuals except qualifying
residents of Iowa, Kentucky, Michigan, and Wisconsin, and
military spouses. For further information, see “When am I not
required to withhold Illinois Income Tax?”
When is compensation paid in Illinois?
The following are general rules for when compensation is
paid in Illinois.
1. If the employee’s service is localized in Illinois because all
of the service is performed in Illinois, then compensation is
considered paid in Illinois and subject to Illinois income tax
withholding.
2. If some of the employee’s services are performed outside
Illinois, but the services outside Illinois are incidental to
the services performed inside Illinois, then compensation is
considered paid in Illinois and subject to Illinois income tax
withholding.
The term “incidental” means any service which is necessary
to or supportive of the primary service performed by the
employee or which is temporary or transitory in nature or
consists of isolated transactions. The incidental service may
or may not be similar to the individual’s normal occupation so
long as it is performed within the same employer-employee
relationship. That is, an individual who normally performs
all of his service in Illinois may be sent by his employer to
another state to perform service which is totally dierent in
nature from his usual work or he may be sent to do similar
work. So long as the service is temporary or consists merely
of isolated transactions, it will be considered to be incidental.
In every case, the ultimate determination to be made is
• whether the individual’s service was intended to be and
was in fact principally performed within Illinois and
• whether any service which was performed in another
state was of a temporary or transitory nature or arose
out of special circumstances at infrequent intervals.
The amount of time spent or the amount of service
performed outside Illinois, in itself, should not be regarded
as decisive in determining whether such service is incidental
to service performed within Illinois.
3. If the employee is an Illinois resident and
• neither of the rules above apply and
• no other state’s taxes are withheld,
then compensation is considered paid in Illinois and is
subject to Illinois income tax withholding.
4. If the employee’s compensation is
• not localized to any state under any of the rules above
and
• the employee performs signicant service within Illinois
for more than 30 working days, and
• the service performed within Illinois is nonincidental to
the employee’s service performed outside Illinois,
then a portion of compensation is considered paid in Illinois
and subject to Illinois income tax withholding. The portion of
compensation subject to Illinois withholding equals the total
compensation paid to the employee multiplied by a fraction
equal to the number of working days the employee spent
within Illinois during the year divided by the total working
days of the year.
“Working day” means all days during the tax year in which
the individual performs duties on behalf of his or her
employer. Days in which the individual performs no duties on
behalf of his or her employer (e.g., weekends, vacation days,
sick days, and holidays) are not working days.
A working day is spent within Illinois if:
• the individual performs service on behalf of the employer
and a greater amount of time on that day is spent by the
individual performing duties on behalf of the employer
within Illinois, without regard to time spent traveling, than
is spent performing duties on behalf of the employer
outside of Illinois; or
• the only service the individual performs on behalf of the
employer on that day is traveling to a destination within
Illinois, and the individual arrives on that day.
Example: Mary is an Missouri resident who earned $60,000
in wages from her employer for the tax year. During the
year, she performed services for her employer for 35 days in
Illinois out of 250 total working days for the year. Accordingly,
14 percent (35 working days divided by 250) of Mary’s
wages, or $8,400, was paid in Illinois and is subject to Illinois
income tax withholding.
Working days spent within Illinois do not include any day in
which the employee is performing services in Illinois during
a disaster period solely in response to a request made to his
or her employer by the government of Illinois, by any political
subdivision of Illinois, or by a person conducting business in
Illinois to perform disaster or emergency-related services in
Illinois.
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“Declared State disaster or emergency” means a disaster or
emergency event
• for which a Governor’s proclamation of a state of
emergency has been issued; or
• for which a Presidential declaration of a federal major
disaster or emergency has been issued.
“Disaster period” means a period that begins 10 days prior
to the date of the Governor’s proclamation or the President’s
declaration (whichever is earlier) and extends for a period
of 60 calendar days after the end of the declared disaster or
emergency period.
“Disaster or emergency-related services” means repairing,
renovating, installing, building, or rendering services
or conducting other business activities that relate to
infrastructure that has been damaged, impaired, or
destroyed by the declared State disaster or emergency.
“Infrastructure” means property and equipment owned or
used by a public utility, communications network, broadband
and internet service provider, cable and video service
provider, electric or gas distribution system, or water
pipeline that provides service to more than one customer or
person, including related support facilities. “Infrastructure”
includes, but is not limited to, real and personal property
such as buildings, oces, power lines, cable lines, poles,
communications lines, pipes, structures, and equipment
5. For compensation for services performed by a nonresident
as a member of a professional athletic team, the amount
that is paid in Illinois is the total compensation for services
performed for the team during the year, multiplied by a
fraction equal to the number of duty days spent within Illinois
by the total number of duty days spent performing services
for the team. See Section 304(a)(2)(B)(iv) of the Illinois
Income Tax Act (IITA) for more guidance.
Limited exceptions to the above rules:
There are three limited exceptions when you are not required to
withhold Illinois Income Tax. These exceptions are described as
follows.
1. The employee works for an employer under the
jurisdiction of the Surface Transportation Board (STB)
and performs regularly assigned duties in more than
one state. Do not withhold Illinois Income Tax unless the
employee is an Illinois resident.
2. The employee works on an aircraft for an air carrier
and performs regularly assigned duties in more than
one state. Do not withhold Illinois Income Tax unless the
employee is an Illinois resident, or, if the employee is not an
Illinois resident, the employee earns more than 50 percent
of the compensation in Illinois (Illinois ight miles versus all
ight miles). Illinois ight miles do not include miles own
over Illinois without taking o or landing.
3. The employee works on a vessel and performs regularly
assigned duties in more than one state. Do not withhold
Illinois Income Tax unless the employee is an Illinois
resident.
Examples of compensation paid in Illinois:
1 Your company employs an Indiana resident to make sales
for your company. You control your employee’s services,
all of which are performed in Illinois. Compensation is
paid in Illinois because all of your employee’s services are
performed in Illinois.
2 Your airline company employs a Missouri resident to
y to various destinations in the United States. Your
employee reports to and ies out of a terminal in Illinois.
According to your records, 58 percent of your employee’s
compensation (ight time in Illinois versus ight time to
other destinations) is earned in Illinois. Therefore, you must
withhold Illinois Income Tax on compensation paid in Illinois
to this employee because more than 50 percent of your
employee’s compensation was earned in Illinois. Illinois
ight miles do not include miles own over Illinois without
taking o or landing.
When am I not required to withhold
Illinois Income Tax?
Unless you enter into a voluntary withholding income tax
agreement, you are not required to withhold Illinois Income Tax
from the following:
• compensation paid to residents of Iowa, Kentucky,
Michigan, and Wisconsin (due to reciprocal agreements
with each of these states);
• compensation paid to a non-military employee whose
spouse is in the military, both of whom are residents of the
same state (other than Illinois), and are only in this state be-
cause the spouse is stationed here by the military or where
the non-military spouse does not live in the same state as
the servicemember but elects to use their servicemember
spouse’s state of residence for tax purposes as allowed by
the Veterans Benets and Transition Act of 2018;
• compensation paid to a non-resident employee who has
performed less than 31 days of service in Illinois and whose
compensation is not localized in Illinois under paragraphs
one and two in the section “When is compensation paid in
Illinois?”
• compensation paid to a non-resident employee whose
service is performed entirely in another state;
• compensation paid to an Illinois resident whose service is
performed entirely in another state, and the compensation is
subject to withholding in another state;
• qualifying payments made for personal service contracts or
prizes awarded from contests conducted in Illinois (Sections
1405.2 and 1405.3 of the IITA);
• compensation that will not be included in the recipient’s
base income (e.g., annuity payments received from qualied
employee benet plans);
• payments subject to withholding under IRC, Sections 3405
or 3406;
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• compensation paid by an employer under the jurisdiction
of the Surface Transportation Board (STB), rail and motor
carriers, to a nonresident employee who performs regularly
assigned duties in more than one state;
• nonresident employees who work on aircraft for an air carrier,
perform regularly assigned duties in more than one state,
and do not earn more than 50 percent of the
compensation in Illinois (Illinois ight miles versus all ight
miles). Illinois ight miles do not include miles own over
Illinois without taking o or landing;
• compensation paid to a master or seaman on a vessel in the
foreign, coastwise, intercoastal, interstate, or noncontiguous
trade, or an individual employed on a shing vessel or any
sh processing vessel;
• compensation paid to an employee whose compensation is
exempt from federal withholding requirements (e.g., “wages”
paid to certain types of ministers); or
• compensation paid to household employees as dened by
the IRS. (For more information, visit www.irs.gov and refer to
IRS Publication 926.) Note: Pursuant to a voluntary federal
agreement, if you withhold federal income tax from your
household employees, Illinois withholding is required. Also,
you may enter a voluntary Illinois withholding agreement. If
you do withhold Illinois income tax, you may report and pay
these taxes annually on Form IL-1040, Illinois Individual
Income Tax Return, Line 20 (No registration is required),
or you may le Form IL-941 quarterly (requires registration
as a withholding agent). For more detailed information,
see Publication 121, Illinois Income Tax Withholding for
Household Employees.
Examples for when withholding is not required.
1 Your company, headquartered in Missouri, hires an Illinois
resident to install computer networks for your Missouri-
based clients. Your employee travels to your clients’ branch
oces in Illinois to complete network installation for a total
of 20 working days. Compensation is not paid in Illinois
because your company headquarters/base of operations
is in Missouri and your employee performed services in
Illinois for less than 31 working days. Therefore, you do not
withhold Illinois Income Tax. (See the note below.)
2 Your company’s main oce is in Indiana. You employ an
Illinois resident to honor copy machine routine maintenance
contracts. Your employee works out of the main oce and
has clients in both Illinois and Indiana. Your employee spent
21 working days in Illinois. You are not required to withhold
Illinois Income Tax because your employees spent less than
31 working days in Illinois. (See the note below.)
Although in these two examples you are not
required to withhold Illinois Income Tax, your employees’
income will be taxed by Illinois because they are Illinois
residents. Therefore, your employees will le returns in
both states. We will give your employees a credit for
taxes paid to the other state. If the amount of tax paid
to the other state does not cover the Illinois tax liability,
your employees may need to make estimated income
tax payments to Illinois.
Am I required to withhold income tax for
another state if my employee is not an
Illinois resident?
If your employee is “paid in Illinois” and is a resident of Iowa,
Kentucky, Michigan, or Wisconsin, you may, but are not required
by Illinois law, withhold income tax for the other state.
If your employee is a resident of a state with whom Illinois does
not have a reciprocal agreement, you must withhold Illinois
Income Tax on all income that is paid in Illinois. You may be
required to withhold tax for another state in which the employee
works or resides. You should contact those states to determine if
you are required to register as a withholding agent.
What forms must my employee
complete?
Form IL-W-4
Your employee must complete Form IL-W-4, Employee’s Illinois
Withholding Allowance Certicate. This is your record of the
number of allowances that your employee is entitled to claim and
would only be disregarded for the following circumstances:
• An employee claims total exemption from Illinois Income Tax
withholding, but has not led a federal Form W-4, Employee’s
Withholding Certicate, claiming total exemption.
• The IRS has instructed you to disregard the employee’s
federal Form W-4.
If a completed Form IL-W-4 is not led, or you are required to
disregard Form IL-W-4, you must withhold Illinois Income Tax with
no allowances.
Most retirement income is exempt from Illinois
Income Tax and no withholding is required, even if federal
income tax is withheld. However, retired taxpayers may
wish to enter into voluntary withholding agreements to avoid
having to pay estimated taxes on their taxable income.
Retired taxpayers who enter into such voluntary withholding
agreements must also complete Form IL-W-4.
If an employee claimed exemption from withholding on federal
Form W-4, you still may be required to withhold Illinois Income Tax
if the employee’s pay is greater than the Illinois allowance amount.
See the example below.
Before December 1 of each year, have your employee review
his or her Form IL-W-4. If your employee’s Illinois withholding
allowances change, the employee must complete a new Form
IL-W-4.
Example:
Sam is single, does not have any dependents, and cannot be
claimed on another person’s tax return. He works for you part-
time. Sam expects to earn $4,000 this year.
Last year Sam earned $3,000, did not have a federal tax liability,
and received a total refund of the federal income tax that was
withheld from his pay. Sam does not expect to owe any federal
income tax this year. Therefore, he claims exemption from
withholding on his federal Form W-4 for this year.
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Although Sam may not owe federal income tax, he will owe
Illinois Income Tax because he is entitled to only one withholding
allowance. The exemption for this allowance is less than his total
pay. Therefore, you must withhold Illinois Income Tax from Sam’s
pay.
Form IL-W-5
Form IL-W-5, Certicate of Residence in Illinois, is completed by
an Illinois resident (not your employee) with whom you have a
written contract who
• is paid for performing personal services (e.g., artistic or
musical performances, or professional consulting services)
and the income earned is taxable under Section 1405.2 of
the IITA, or
• receives payment for prizes and awards from a contest
conducted entirely in Illinois (e.g., game shows, amateur
talent contests, dog or horse shows) and the income earned
is taxable under Section 1405.3 of the IITA.
You are not required to provide annual information reports of
the amounts you pay in either of these situations. You must,
however, keep this information in your records and provide it to
us if we request.
Instead of completing Form IL-W-5, the recipient
may le a certicate of in-state residence on any invoice,
billing statement, or contest application submitted to the
withholding agent.
Form IL-W-5-NR
To be exempt from Illinois Income Tax withholding requirements
you must complete Form IL-W-5-NR, Employee’s Statement of
Nonresidence in Illinois, if
• you are a resident of a state (Iowa, Kentucky, Michigan, and
Wisconsin) with whom Illinois has a reciprocal agreement, or
• your spouse is in the military, you and your spouse are
both residents of the same state (other than Illinois), and
you are in Illinois only because your spouse is stationed
here by the military or you do not live in the same state as
your servicemember spouse, but you have elected to claim
their state of residence for tax purposes as allowed by the
Veterans Benets and Transition Act of 2018.
If your employee does not complete this form, you must withhold
Illinois Income Tax. If your employee moves out of the state
of residence designated on the original Form IL-W-5-NR, the
employee must notify you of the change within 10 days and le a
new Form IL-W-5-NR, if applicable.
Form IL-W-6 and Worksheet
Form IL-W-6, Certicate of Days Worked in Illinois for Non-
Residents, is completed by a non-resident who is paid for
performing services within Illinois for more than 30 working days
during the taxable year on your employer’s behalf.
Employers are required to have a copy of the certicate and
worksheet on le for each non-resident employee who is
expected to work more than 30 working days in Illinois and you
do not maintain a time and attendance system which
• requires the employee, on a contemporaneous basis, to
record the work location for every day worked outside of the
state where the employment duties are primarily performed;
• and allows the employer to allocate the employee’s wages
for income tax purposes among all states in which the
employee performs services.
You are not required to submit this form to IDOR. You must,
however, keep this information in your records and provide it
upon request.
Do I owe other Illinois employment
taxes?
Check with the Illinois Department of Employment Security
(IDES) for more information about unemployment insurance
contributions for employers. Visit ides.illinois.gov or call the IDES
Employer Hotline at 1 800 247-4984.
What forms must I give my employee?
Before January 31 of each year, you must give your employee
three copies of federal Form W-2, Wage and Tax Statement, or,
if applicable, any version of Form 1099 (e.g., Form 1099-MISC,
Form 1099-INT, Form 1099-R).
If your employee permanently discontinues employment before
the close of the calendar year or you terminate a federal
voluntary withholding agreement, you must give the employee
(or other person receiving payments subject to withholding) a
completed federal Form W-2 within 30 days of the last payment
for which withholding was required. You must keep records of
all employment records, including undeliverable Forms W-2
and Forms 1099, for at least four years after the date you are
required to give the form to the employee.
What forms must I submit to the Illinois
Department of Revenue?
You are required to electronically le Form IL-941, Illinois
Withholding Income Tax Return, quarterly. See Publication 131,
Withholding Income Tax Payment and Filing Requirements for
more information.
You are required to electronically submit Forms W-2, W-2c, and
W-2G to the Illinois Department of Revenue by January 31.
If you are unable to le these forms, or Form IL-941,
electronically, you may request Form IL-900-EW, Waiver
Request, through our Taxpayer Assistance Division at
1 800 732-8866 or 217 782-3336. The Waiver Request must
be completed and submitted back to the Department. You
will be notied if the Waiver Request is approved or denied.
See Publication 110, W-2, W-2c, W-2G, and 1099 Filing and
Storage Requirements for Employers and Payers, for additional
information.
Page 8 of 12
Who is Required to Withhold Illinois Income
PUB-130 (R-08/22)
50.00 IL 36-XXXXXXX 2000.00
How do I complete Form W-2 for my employee showing income and withholding for
Illinois?
For Illinois purposes when completing Form W-2, Box 16, enter the amount of wages paid in Illinois or paid to an Illinois resident
employed in a reciprocal state (Iowa, Kentucky, Michigan, or Wisconsin), under the rules in the section “When is compensation
paid in Illinois?”even if you withheld other states’ tax on some of those wages or withheld Illinois tax on a dierent amount. If none
of the employee’s wages were paid in Illinois or for an Illinois resident’s employment in a non-reciprocal state, report zero in Box 16
even if you withheld Illinois income tax from those wages. Illinois residents who pay income tax to other states need this information
in order to correctly compute the credit allowed for those taxes. Make sure that the sum of the state wages in Box 16 are equal to
Box 1.
Example 1: Tom is an Illinois resident who works only in Indiana (a non-reciprocal state). His employer is voluntarily withholding
Illinois taxes because the Schedule CR credit Tom receives from his Indiana income will not cover his Illinois tax liability. His gross
wages are $33,165. The Form W-2 should be completed as follows:
IL 36-XXXXXXX
50.00
2000.00
S A M P L E
S A M P L E
IN 36-XXXXXXX $33,165 $994.95
IL 36-XXXXXXX $0 $829.13
How do I complete Form W-2G or Form 1099 for my payee showing withholding for
Illinois?
For Illinois purposes when completing federal Forms W-2G, or any Forms 1099, you must include any Illinois income tax withheld
on the line for “State income tax withheld” or “State tax withheld.” Follow the Instructions for the form. Make sure to use the
prex “IL.”
Form W-2G sample:
Form 1099-MISC sample:
S A M P L E
PUB-130 (R-08/22)
Who is Required to Withhold Illinois Income
Page 9 of 12
PUB-130 (R-08/22)
S A M P L E
When must I withhold Illinois Income
Tax from lottery winnings?
You must withhold Illinois Income Tax each time you make a
single payment of Illinois lottery winnings of $1,000 or more.
It does not matter that several individuals may jointly hold the
winning ticket and each person’s “share” is less than $1,000.
You must withhold Illinois Income Tax for both residents and
nonresidents.
When must I withhold Illinois Income
Tax from gambling winnings?
You must withhold Illinois Income Tax from gambling winnings,
including sports wagering winnings, you pay any time the
winnings are subject to federal income tax withholding
requirements and are not subject to another state’s withholding
requirements.
In general, winnings that currently are subject to federal income
tax withholding include proceeds of more than $5,000 in a single
payment from
• a wager placed in a sweepstakes, wagering pool, or lottery
(other than a state-conducted lottery); or
• all other wagering transactions, including a wagering
transaction in a parimutuel pool with respect to horse races,
dog races, or jai alai, if the amount of the proceeds is at
least 300 times as large as the amount wagered.
IL 36-XXXXXXX50.00 2000.00
S A M P L E
IL 36-XXXXXXX 50.00
S A M P L E
Form 1099-R sample:
Form 1099-INT sample:
Withholding Illinois Income Tax for Lottery or Gambling
Winnings
Bingo and slot machine winnings are subject to federal
withholding requirements for amounts of $1,200 or more.
Winnings from keno of $1,500 or more also are subject to federal
withholding requirements. See 26 USCA 3402(q) of the Internal
Revenue Code and the IRS’ instructions for federal Forms 5754
and W-2G for more information.
What forms must a winner complete?
Each time you pay Illinois lottery winnings of $1,000 or more or
gambling winnings of more than $5,000 in a single payment,
the winner must complete Form IL-5754, Statement by Person
Receiving Gambling Winnings. This form helps you identify
which winners are Illinois residents. Keep this form in your
records to show who received winnings and to whom the
winnings are taxable. You will use this information when you
prepare federal Form W-2G.
What forms must I give each recipient?
By January 31 of each year, you must give each recipient two
copies of federal Form W-2G.
You must keep any undeliverable Form W-2G for at
least three years after the date you are required to give the
form to the recipient.
Page 10 of 12
Who is Required to Withhold Illinois Income
PUB-130 (R-08/22)
Withholding Illinois Income Tax for Purchases of the
Rights to Lottery Winnings
Do I have an obligation to withhold
Illinois Income Tax from purchased
lottery winnings?
You must withhold Illinois Income Tax from the purchase price of
rights to future Illinois lottery winnings that you purchased from
another entity. The Illinois Lottery noties us of the purchase
and we send instructions to you on how to remit the Illinois
withholding to us. Make sure to follow the instructions you are
sent and use the account number we assign to you.
When must I withhold Illinois Income Tax
from purchased lottery winnings?
You must withhold Illinois Income Tax at the time you purchase
the lottery rights. You must register and report the withholding
for each purchase on Form IL-941. For more information, refer
to Informational Bulletin FY 2014-08. The tax is withheld at the
current income tax rate.
What forms must I submit to the Illinois
Department of Revenue?
You are required to
• electronically submit Form W-2G to Illinois Department of
Revenue by January 31.
• electronically le Form IL-941, Illinois Withholding Income
Tax Return, quarterly. See Publication 131 for more
information on ling and payment requirements.
If you are unable to le your forms electronically, you may
request Form IL-900-EW, Waiver Request, through our Taxpayer
Assistance Division at 1 800 732-8866 or 217 782-3336. The
Waiver Request must be completed and submitted back to
IDOR. You will be notied if the Waiver Request is approved or
denied.
What if the due date falls on a
weekend or state recognized holiday?
Any time a due date falls on a weekend or state recognized
holiday, we adjust the due date to the next business day.
Where do I get help?
• Visit our website at tax.illinois.gov
• Call us at 1 800 732-8866 or 217 782-3336
• Call our TDD (telecommunications device for the deaf) at
1 800 544-5304
• Write to
ILLINOIS DEPARTMENT OF REVENUE
PO BOX 19001
SPRINGFIELD IL 62794-9001
PUB-130 (R-08/22)
Who is Required to Withhold Illinois Income
Page 11 of 12
PUB-130 (R-08/22)
Forms completed by employees and lottery or gambling winners
If employee/payee and for Illinois purposes,
completes you withhold
you withhold federal income tax for an employee or other
whose compensation is paid in Illinois Form IL-W-4 based on the number of allowances claimed.
you enter into a voluntary withholding agreement with
your employee or payee Form IL-W-4 based on the number of allowances claimed.
you pay an Illinois resident for personal services, and the
income is reportable under Section 1405.2 of the
Illinois Income Tax Act Form IL-W-5 zero.
you pay an Illinois resident prizes or awards from a contest
entirely in Illinois and the income earned is reportable
under Section 1405.3 of the Illinois Income Tax Act Form IL-W-5 zero.
your employee is a resident of Iowa, Kentucky,
Michigan, or Wisconsin or is a nonresident spouse of a
military servicemember and is only in Illinois because
the servicemember is stationed here Form IL-W-5-NR zero.
you are a non-resident Illinois employee
and you expect to perform non-incidental services
for more than 30 working days within Illinois on your
employer’s behalf during the calendar year Form IL-W-6 based on the number of allowances claimed.
you pay lottery winnings of $1,000 or more
to an Illinois resident or nonresident Form IL-5754 the full rate of tax (no exemptions).
you pay gambling winnings of more than $5,000, including
sports wagering winnings, provided the payment is
subject to federal withholding. Form IL-5754 the full rate of tax (no exemptions).
you purchase rights to Illinois Lottery Winnings and withhold none the full rate of tax (no exemptions).
Illinois income tax from the purchase price
You must keep a copy of these forms in your records. By January 31 of each year, you must give your employee
three copies of federal Form W-2, Wage and Tax Statement. If you withheld from gambling winnings, you must give
each recipient two copies of federal Form W-2G.
You must submit your Forms W-2, W-2c, and W-2G electronically to the Illinois Department of Revenue by
January 31.
For the current tax rate, refer to the Tax Rate Database on our website.
Illinois Income Tax Forms for Determining Withholding
from Employees and Lottery or Gambling Winners
For additional withholding tax information, refer to these related publications:
• Publication 131, Withholding Income Tax Payment and Filing Requirements
• Booklet IL-700-T, Illinois Withholding Income Tax Tables
• Publication 110, W-2, W-2c, W-2G, and 1099 Filing and Storage Requirements for
Employers and Payers, including New 1099-K Electronic Filing Requirements
• Publication 121, Illinois Income Tax Withholding for Household Employees
Page 12 of 12
Who is Required to Withhold Illinois Income
PUB-130 (R-08/22)
Visit our website at tax.illinois.gov. For specic phone number and email contacts, see our
Contact Us page.
Call us at 1 800 732-8866 or 217 782-3336.
Call our TDD (telecommunications device for the deaf) at 1 800 544-5304.
Write us at Illinois Department of Revenue, PO Box 19001, Springeld, IL 62794-9001.
Call our 24-hour Forms Order Line at 1 800 356-6302.
Contact Information
15 Executive Drive
Business Center One, Suite 2
Fairview Heights, Illinois 62208-1331
200 South Wyman Street
Rockford, Illinois 61101-1237
Oce Locations
Suburban North Regional Building
9511 Harrison Street FA 203
Des Plaines, Illinois 60016-1563
555 West Monroe Street
Suite 1100
Chicago, Illinois 60661-3605
Willard Ice Building
101 West Jeerson
Springeld, Illinois 62702-5145
2309 W. Main, Suite 114
Marion, Illinois 62959-1196
Printed by authority of the state of Illinois - web only, one copy.
